TEXT OF INTERVIEW

BOB MOON: If we lived in different times, those people in the town square might have taken up logs and torches and headed toward the credit card company offices. But this being 2009, they call consumer groups to complain. And those complaints have become enough of a roar that America might see some kind of credit card legislation passed for the first time in a long time. So says Linda Sherry, she's director of National Priorities for the advocacy group Consumer Action. I asked her about the major credit card gripes her offices passed along to Washington.

LINDA SHERRY: I think that the problems that we really have are when the balances shoot up overnight from the automatic extensions of credit, interest rates and minimum payments that double, and the large penalty fees in the industry nowadays. There's just no way that consumers can really count on their next minimum payment being a certain amount so that they can budget for it, because it could be changed at the drop of a hat, and then they wouldn't know what they owed the next month. And maybe they wouldn't be able to afford it either.

MOON: One of the people we spoke to on the street was wondering about the idea that if they close your account, that's going to ding your credit score. Is that true? If they -- if the credit card company closes your account, that hurts your overall credit score?

SHERRY: Mmhmm. Smart consumer that you found on the street there. Yes. When an account is closed by a bank or a financial institution, it's almost as if the cardholder's done something wrong, so the account is being closed because it's not at the consumer's request. Overall, people who manage their credit carefully are not going to be subjected to these wild swings on their credit scores. But some of the things that the card companies are doing right now we think are problematic, and one is slashing the credit limits to the point where you're very close to your existing balance. We understand why the companies are doing it. They're doing it to basically pull back and contract the amount of credit that's out there so that they can better manage their accounts. But the way they're doing it is extremely ham-handed. They're getting people so close to their existing balance that they may, indeed, get a ding on their credit score. And if other things are going on in that person's life, other accounts are having any kind of problems as it were, these things all together can cause quite a decline in a consumer's credit score, and thereby make it very difficult for them to get credit in the future.

MOON: And it's tough to live without a credit card these days -- renting a car, or even buying a ticket for the New York subway.

SHERRY: People do need credit cards. And I'm looking to the day when we get back to more sane credit cards. Perhaps we need to accept the fact that we need to pay maybe a small annual fee every year in order to get a rate that we can rely on, that isn't going to necessarily change, you know, when the wind blows. So I think that there is a lot of room here for issuers to get together with consumer advocates and government regulators, etc. and design a new way of doing business -- a way that gives rights to both consumers and allows the companies to make a decent profit, if maybe not the gross profits they've been making off of fee income for the past decade.

MOON: And is it your sense that the climate is indeed changing here toward the consumer?

SHERRY: Oh, most definitely. To have the president talking about the need for substantive regulation and legislation for credit cards, this is a totally refreshing place to be.

MOON: Linda Sherry is director of National Priorities at Consumer Action. Thank you for joining us.

SHERRY: Thank you.